Only Buy What You Can Afford

You cannot keep out of trouble by spending more than you earn.  Abraham Lincoln, 16th President of the US, 1881-1865

Personal debt is a huge problem in the Philippines, when you consider the fact that collectively we have amassed credit card debts of 10 billion pesos. 

The trend is similar when it comes to interest free purchases. People are increasingly being sold on the premise of buy now, pay later, with alarming consequences. Too often, people don’t pay the balance of their purchase within the interest free period, resulting in massive financial penalties. Put simply, people end up paying so much more than the items value all so they can have it now.

Having it now is why people get themselves into debt in the first place. If they don’t have the money, they can simply reach for that credit card or purchase on interest free finance. It can certainly lead to trouble in the form of bad debt, so is it really necessary to get that LED television now? Is it really necessary to take on debt to buy that latest handbag or the flash fridge for your new kitchen? Do you really need to buy a new lounge?

When it comes to spending money, my advice is plain and clear: Only buy what you can afford! If you don’t have the money, save the money or look for ways to increase your income to facilitate that purchase. Whatever you do, don’t buy now and pay later via a credit card or interest free deal.

Here are my tips to help you get in a position to make purchases using your own money  and NOT credit:

Cut your credit cards up: Credit cards just aren’t worth the stress! Cut them up now.

Pay down your credit cards: Use savings if you can, but get rid of them ASAP!

Get a debit card: These are great for paying bills and making purchases that re-quire a credit card. A debit card is like a credit card, but it uses your own money instead, so no debt!

Get into a saving routine: With careful planning and a commitment to budgeting, you can get into an effective saving routine.

Create a short term savings account: This is for things like purchases and holidays  the things you might otherwise pay for using credit. Remember, you have cut your cards up and you don’t use them anymore. Commit to building a short term savings account you can use to finance your purchases, and you won’t need to resort to credit.

Commit to increasing your household income: There are plenty of ways you can do this, whether it’s selling something online or opening your own eBay store. Do your research!

Buy secondhand: Forget expensive interest free purchases and using credit  buy secondhand! Ebay is a great place to buy if you ask me, so whether it’s clothing, shoes, appliances or furniture, take a look at eBay!

Avoid shopping centers for entertainment: Get out and explore a national park or take a day trip. Avoid shopping centers!

Buy only what you can afford  it can be done and you’ll never go back to credit!

Helpful Tips for You:

Cut your credit cards up

Pay down your credit cards

Get a debit card

Get into a savings routine

Create a short term savings account

Commit to increasing your household income

Buy secondhand

Avoid shopping centers for entertainment

Shared by Coach Amos

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Blog by John de Ridder, 0419-427-419, john@focusyourmoney.com.au, Canberra, Australia